CBS (CBS) Still a SELL, Analysts Still Dreaming

While CBS (CBS) reported roughly in-line Q2 numbers yesterday, Goldman sees no reason to change their mind about the stock. In fact, the bank has trimmed their target $0.50 to $15.50. Until the consensus estimates come down, Goldman's going to be a seller:

We continue to believe consensus 2008 and 2009 estimates are too high, not fully reflecting the difficult economic issues, though the company’s guidance adjustment (to low-single digit EBITDA growth from +3%-+5%) may begin to address the disconnect with consensus.

While cost cuts at local TV/radio are a positive, we think the national TV business represents a substantially larger portion of the cost base, and thus cuts that only impact local are unlikely to be enough to avoid sharp margin compression from even modest revenue declines. Longer-term, we believe CBS’ opportunity lies in continuing to aggressively shed slow growth assets and focus on cutting costs, while entering higher growth businesses to change its secular growth profile.